Synopsis

This judgment resolves the recurring question whether employees of a unit established and directly administered by the Department of Atomic Energy (DAE)—specifically the Heavy Water Plant (HWP), Tuticorin—are entitled to gratuity under the Payment of Gratuity Act, 1972 (PG Act) or are excluded from its ambit because they hold civil posts under the Central Government and are governed by the CCS (Pension) Rules, 1972. The Supreme Court, affirming the Madras High Court, holds that HWP is not a separate legal entity but an adjunct/annexe of the DAE. Consequently, its employees are “persons who hold a post under the Central Government” and are expressly excluded from the definition of “employee” under Section 2(e) of the PG Act. The Court delineates the concept of “jurisdictional fact” as the pre‑condition for the applicability of the PG Act and reaffirms that a general overriding provision (Section 14) cannot bring within the Act those who are excluded at the threshold definitional stage.

1. Basic Information of the Judgment

Case Title N. Manoharan etc. v. The Administrative Officer & Anr. (along with connected appeals)

Citation 2026 INSC 143

Jurisdiction Civil Appellate Jurisdiction, Supreme Court of India 

Coram Division Bench: Hon’ble Mr. Justice S.V.N. Bhatti (author) and Hon’ble Mr. Justice 

Bench Strength Division Bench (two Judges)Civil Appeal Nos. Arising out of SLP (C) Nos. 22628‑22637, 22638‑22669 & 22670 of 2024

Date of Judgment February 11, 2026

Impugned Order Common Judgment dated 21.06.2023 of the Division Bench of the High Court of Judicature at Madras in Writ Appeal No.1687 of 2021 and batch

2. Legal Framework and Precedents

A. Statutes and Statutory Provisions

1. The Payment of Gratuity Act, 1972 (PG Act)
   Section 1(3)(b): Applicability to every factory, mine, oilfield, plantation, port, railway company, shop or establishment to which the Industrial Disputes Act, 1947 applies.
   Section 2(e) – Definition of “employee” (as amended):
   “employee” means any person (other than an apprentice) employed on wages … in any establishment, factory, mine, oilfield, plantation, port, railway company or shop—
   (i) to do any skilled, semi‑skilled or unskilled, manual, supervisory, technical or clerical work …;
   but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.
   [The judgment clarifies that the exclusionary limb is disjunctive in effect: the words “or” appear in the clause, and the Court reads it as “does not include … who holds a post under the Central Government … or is governed by any other Act or by any Rules providing for payment of gratuity”.]
   Section 5: Power of the appropriate Government to exempt any establishment from the operation of the Act.
   Section 14: Overriding effect – the provisions of the PG Act shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act.

2. The Atomic Energy Act, 1962 (AE Act)
   Section 3: General powers of the Central Government to produce, develop, use and dispose of atomic energy either by itself or through any Authority or Corporation established by it or a Government Company.
   The DAE is the administrative department through which the Central Government exercises its powers under the AE Act.

3. The Central Civil Services (Pension) Rules, 1972
   Provide for retirement benefits including gratuity to Central Government employees.
   The appointment orders of the appellants explicitly stated that they were governed by the CCS Rules.

... Upgrade to a Premium Plan to view the full judgment.